A cloud of dense, black smoke rose into the sky as firefighters, helped by residents, tried to extinguish the flames. Twisted wrecks of cars lay scattered in the street, in front of the blackened ruins of shops.

A police official said 28 people were also wounded and 25 shops and 10 cars destroyed in the explosion in the al-Haseer area of northern Kirkuk.

Initial reports suggested it took place in front of a terminal for buses heading to the northern cities of Sulamainiya, Mosul and Arbil.

A middle-aged motorist who refused to be identified said he had been driving down the street when the blast shattered the windows of his car. He was slightly wounded by flying glass.

''Kirkuk is not a place to live any more. Wherever you go there are roadside bombs and car bombs. The security forces cannot find a solution for the terrorism,'' he said.

Kirkuk, which sits on Iraq's northern oil fields, is contested by Kurds, Turkmen, Shi'ite and Sunni Arabs. Kurds want it to be incorporated into their largely autonomous Kurdistan region, but Arab residents oppose that.

Analysts have warned of a bloodbath unless the international community and the Iraqi government pay more attention to settling the city's disputed status.

Kirkuk's police chief escaped a car bomb attack on his motorcade earlier this month in which seven people were killed and 50 wounded.